CHAPTER 11 DECISION MAKING AND RELEVANT INFORMATION 11-16 (20 min.) Disposal of assets. 1. This is an unfortunate situation‚ yet the $75‚000 costs are irrelevant regarding the decision to remachine or scrap. The only relevant factors are the future revenues and future costs. By ignoring the accumulated costs and deciding on the basis of expected future costs‚ operating income will be maximized (or losses minimized). The difference in favor of remachining is $2‚000: (a) (b) Remachine Scrap
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devices are allowing us to have more distractions and preventing us to have intimate relationships with people. “Shut Down Your Screen Week” is a worldwide event in which people give up their devices for a week. Clearly‚ this event will have a beneficial effect on our learning as well as our relationships towards people. One reason why our school should participate in the national “Shut Down Your Screen Week” is because it could prevent students from being distracted. Instead of students worrying about
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called “Shut Down Your Screen Week.” If one or your students are on their phone while doing homework‚ they can be easily distracted and lose concentration on what they were doing before they picked up their phones or checked an email. Students will be more focused on what they are doing making information easier to take in and understand. Plus‚ using the internet or any sort of technology can have terrible consequences such as‚ not being able to focus on anything at all. Doing “Shut Down Your Screen
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1. The cost of a computer system installed last year is an example of: (Points: 2) a sunk cost a relevant cost a differential cost an avoidable cost 2. In evaluating different alternatives‚ it is useful to concentrate on: (Points: 2) variable costs fixed costs total costs relevant costs 3. Relevant costs in a make-or-buy decision of a part include: (Points: 2) setup overhead costs for the manufacture of the
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SHORT-RUN TACTICAL DECISIONS The organizations strive to earn short-run profits. In making short-run decisions‚ not all cost and revenue data is relevant. The cost data relevant for decision-making is referred to as relevant costs and that which is not useful for decision-making is non-relevant costs. On the revenue side‚ the only relevant revenue is the incremental & differential revenue. Relevant and Non-Relevant Costs: 1. Future Costs and Sunk Costs (IR): A future cost is that cost yet to be incurred
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Cost Accounting: A Managerial Emphasis Chapter 11 Decision Making and Relevant Information Copyright © 2013 Pearson Canada Inc. 11 - 1 Cost Accounting: A Managerial Emphasis Decision Model • The process of making a choice‚ often involving both quantitative and qualitative analyses • Quality of the choice depends upon the qualify of the information obtained – Perfect information is never available 1 Copyright © 2013 Pearson Canada Inc. 11 - 2 Cost Accounting: A Managerial Emphasis Decision
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Business Economics Case Number 6 Topic : Elasticity of Demand Objective: a) To apply the concept of elasticity of demand b) To correlate elasticity with decision making Part -I President Mr. Chatterjee of Indian Institute of Business Economics (IIBE)‚ India is concerned about the financial state of his institution. Last year there was a loss of Rs.1.5 million and the trustees are getting restless. Currently there are 1000 full-time students‚ out of that 700 are degree students from
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Case Analysis Clayton Industries: Peter Arnell‚ country manager for Italy Submitted to: Prof. Payal Mehra Submitted by: Introduction to the Case Peter Arnell‚ the new Country manager of Clayton SpA‚ Italy‚ was responsible for the Compression chiller manufacturing unit in Brescia and marketing of the same in Italy‚ Germany and Switzerland. He faced challenges due to global recession and reduction in revenue for the third consecutive year. The corporate leadership has huge hopes on him
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CLAYTON INDUSTRIES 1º Executive summary: Clayton Industries has been beaten by the current economic situation. But there is one European subsidiary that is suffering more than the rest. The Italian plant is having deep losses and needs to be re-established. The European head has appointed a new plant director in Italy to make this factory profitable or to take another decision to face the current scene and the possibility of growing in few years. 2º SWOT Analysis: Strengths: Support from
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Clayton Industries: Peter Arnell‚ Country Manager for Italy Major issues : a. Many European people saw air conditioning as an luxury item which is harming environment. b. Europeans have strong national brand preferences. c. They are losing both potential commercial customer and the chance to reach in other parts of Europe. d. Some of Asian produces had been able to gain penetration in Europe‚ largely on the basis of price. e. Its air conditioners are fit poorly with Italian buildings
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